Shoprite investors approve R1.7bn repurchase of Whitey Basson’s shares

Shoprite shareholders voted in favour of the purchase of about R1.75bn of shares from former CEO Whitey Basson, enabling Africa’s largest food retailer to buy at a discount to the current share price.

The decision enables the Cape Town-based company to buy 8.68-million shares from Basson at R201.01 per share after he exercised a put option granted to him 14 years ago.

That compares with a market price of R221.98 at 10.54am in Johannesburg on Tuesday.

Billionaire Christo Wiese, Shoprite’s largest shareholder and SA’s fourth-richest person with a net worth of $5.6bn, said on August 22 that the 2003 put option served to ensure Basson didn’t “flood the market” with shares and was also part of an incentive to retain him in the role.

The shares could always be reissued to investors, he said after the Tuesday vote.

The decision comes weeks before a partial tie-up of Shoprite and the African unit of retailer Steinhoff International Holdings, a deal that allows Wiese, the chairman and biggest shareholder of both companies, to combine his retail assets after a proposed merger fell through earlier this year.

Speaking after the vote in Cape Town, Basson said he was pleased with the outcome as this gave him certainty over the price he will get for the stock.

His position as vice-chairman ends at the end of this month and he said he was still considering his next move.

Basson, 71, retired as CEO at the end of 2016 after almost four decades in the role.

He still holds some Shoprite shares through other companies in which he has stakes, he said on August 22, without specifying the amount.

Wiese owns about 15% of Shoprite’s ordinary listed shares and a further 30% in voting rights.

The Public Investment Corporation, which looks after state workers’ pensions and is Africa’s biggest money manager with assets of R1.6-trillion, holds about 10% of the company and is its second-largest shareholder.

The move was backed by 95% of the shareholders that voted, with 12% of shareholders abstaining.

Steinhoff’s African unit, known as Star, will purchase about 128-million Shoprite shares at R215 each as part of a planned spin-off from its parent company. It will own almost 23% of the food retailer after the deal.

Bloomberg